2010 Strategy Compensation Study January 28, 2011

Transcription

1 2010 Strategy Compensation Study January 28, 2011 Charles Aris, Inc. Wachovia Tower 300 N. Greene Street Suite 1800 Greensboro, NC

2 Charles Aris, Inc. Strategy Practice Charles Aris, Inc. is a boutique executive search firm that was founded in The Strategy & Business Development division at Charles Aris is led by Chad Oakley, a former Bain & Company consultant and Wharton. Since its inception in 2003 the Strategy & Business Development division has placed over one hundred Candidates, at multiple levels, including Vice President, Director, Manager and Analyst. The division's client base is primarily the Corporate Strategy teams of industry leading Fortune 500 companies and the investment teams of leading Private Equity firms. The Candidates that we place typically work for top tier strategy consulting firms and possess Undergraduate and Masters degrees from the world's leading educational institutions. For more information about the Charles Aris Strategy & Business Development practice please visit or contact any of our team members below: Chad Oakley President & Chief Operating Officer ext chad.oakley@charlesaris.com Ashley DeBruin Project Manager - CPG ext ashley.debruin@charlesaris.com Jody Karavanic Project Manager - Retail ext jody.karavanic@charlesaris.com Caroline Wilson Project Manager Private Equity ext caroline.wilson@charlesaris.com This information Copyright 2011 is confidential Charles Aris, and Incorporated. was prepared All by rights Charles reserved. Aris, Inc Not solely to be for utilized the use by of any our third client; party it is without not to be the utilized prior consent by any third of Charles party Aris, without Incorporated. our prior consent 2

3 Executive Summary Charles Aris, Inc. is pleased to present the 2010 Strategy Compensation Study. Key facts and learnings about the study are as follows: During the course of 2010 Charles Aris recruiters spoke with 3,263 strategy candidates. Over 99% of these individuals were actively employed with industry leading consulting firms, corporations and private equity firms. As you might imagine detailed discussions around compensation happen only on an as needed basis (once a candidate expresses interest in an opportunity and moves forward in the qualifying process). For the purposes of this study we have distilled only those compensation data points from candidates that were actively employed by consulting firms. The total number of data points for this study equals was a banner year for consulting. Many top firms experienced their best year ever in terms of total revenues. As such, retaining talent became a top priority for consulting firms, and thus consultant compensation was very strong. Many firms provided mid-year raises in This was done in an effort to offset the lack of year-end raises in 2009 (and in some cases the lack of year-end bonuses in 2009 as well). It s important to keep in mind that almost all firms provided end of year raises in 2010 as well, which were largely expected to fall between 10-15%. Note that 2010 yearend raises will not be reflected in this study end of year bonuses were expected to exceed established targets. Compensation data points are self-reported by consultants, and are NOT verified through any other means. While this implies that consultants have the opportunity to be less than honest about their compensation, we feel extremely confident that the data is accurate given the consistency in responses we received across firms. This information Copyright 2011 is confidential Charles Aris, and Incorporated. was prepared All by rights Charles reserved. Aris, IncNot solely to be for utilized the use by of any our third client; party it is without not to be the utilized prior consent by any third of Charles party Aris, without Incorporated. our prior consent 3

4 Input Data by Consulting Firm 100% 75% 50% 25% 0% 216 Total Data Points Other The Parthenon Group L.E.K. Consulting A.T. Kearney Monitor Booz & Company The Boston Consulting Group Bain & Company McKinsey & Company Input Data By Consulting Firm Our 2010 Compensation Study is driven by 216 data points from consultants across fifteen firms. 65% of the data points come from The Big Three firms: McKinsey & Company, Bain & Company and The Boston Consulting Group. Of the 216 total data points, 145 come from post- consultants and 71 come from pre-/undergraduate consultants. We eliminated a small percentage of outlier data points that would have adversely skewed the data. We also excluded Partner compensation data points from this study. During the course of 2010 we spoke with many Partners with graduation dates in the range of our study, but their higher compensation dramatically skewed the data to a point where it would no longer be useful to our clients. This information Copyright 2011 is confidential Charles Aris, and Incorporated. was prepared All by rights Charles reserved. Aris, IncNot solely to be for utilized the use by of any our third client; party it is without not to be the utilized prior consent by any third of Charles party Aris, without Incorporated. our prior consent 4

5 Average Compensation by Graduation Year Average Total Compensation* for Strategy Consultants by Graduation Year - The number at the top of each column = total annual compensation* - The % listed within each column = the portion of total compensation represented by annual bonus $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $73,106 6% $83,685 12% $106,936 17% $173,676 22% $188,570 23% $215,226 25% $241,272 29% $266,237 32% $270,375 32% $281,333 34% $ Bachelors 2008 Bachelors 2007 Bachelors ^ 2003^ 2002^ N = Std Dev. = $8.1k $8.8k $32.7k $23.5k $24.2k $50.2k $40.5k $67.2k $46.2k $52.6k Median = $72.1k $81.0k $96.3k $170.0k $186.0k $205.5k $227.7k $260.0k $276.0k $268.5k *Base salary plus target annual bonus only. Does not include retirement contribution, sign-on, car allowance or other such cash equivalents. ^Pre-Partner data points only, i.e. we excluded compensation data points from anyone at Partner level or equivalent as it skewed the data significantly This information Copyright 2011 is confidential Charles Aris, and Incorporated. was prepared All by rights Charles reserved. Aris, IncNot solely to be for utilized the use by of any our third client; party it is without not to be the utilized prior consent by any third of Charles party Aris, without Incorporated. our prior consent 5

6 2010 Sample Industry Offers Below you will find a subset of 2010 accepted corporate and private equity** offers for Charles Aris, Inc. candidates from Tier 1 Strategy Firms. Consulting Firm Consulting Title Education Consulting $$ (Base + %) Industry Offer* (Base + %) Industry Title Big 3 Associate B.S $138, % $115, % Manager Big 3 Analyst B.A $85, % $90, % Sr. Analyst Big 3 Analyst B.A $88, % $85, % Sr. Analyst Pre Post Top 10 Analyst B.A $66,000 + no bonus $80, % Sr. Analyst Big 3 Analyst B.A $70, % $110, % Associate (PE**) Big 3 Manager 2006 $131, % $135, % Sr. Manager Big 3 Manager 2007 $136, % $140, % Director Big 3 Manager 2007 $145, % $150, % Director Big 3 Manager 2007 $148, % $160, % Director Big 3 Manager 2007 $153, % $160, % Director Big 3 Manager 2007 $155, % $165, % Director Big 3 Associate 2008 $121, % $141, %^ Director Top 10 Manager 2007 $165, % $160, % Director Big 3 Manager B.S $161, % $168, %^ Director Big 3 Manager 2007 $148, % $160, % Director Ex-Big 3 Sr. Manager 1998 $188, % $300, % VP *Base salary plus target annual bonus only. Does not include equity, retirement contribution, sign-on, car allowance or other such cash equivalents. ^European location See titling structure on slide 7 This information Copyright 2011 is confidential Charles Aris, and Incorporated. was prepared All by rights Charles reserved. Aris, IncNot solely to be for utilized the use by of any our third client; party it is without not to be the utilized prior consent by any third of Charles party Aris, without Incorporated. our prior consent 6

7 Consultant Competencies The matrix below defines the expected competencies for consultants at each level. Title at Consulting Firm* Analyst Associate Manager Senior Manager Partner Years of Experience 1-3 yrs Pre- 1-2 yrs Post- 2-4 yrs Post- 4-6 yrs Post- 6+ yrs Post- Current Education undergraduate degree and earlier Current Compensation Range $70k - $135k $120 - $140k $140 - $165k $165 - $225k $225+ Consultant Competencies Breakdown by Position (The competencies, by percentage, that you should expect at each level see definitions on next slide) 100% 75% 50% Influence/Lead Influencing/ Leading Selling/ Influencing/ Leading Selling/ Influencing/ Leading 25% Analytics/ Slide Building Analytics/ Slide Building Analyst Associate Analytics/Slides Manager Senior Manager Partner *Note that titles differ significantly by firm. These are meant to serve as generic titles that work across all firms. This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent 7

8 Consultant Competency Definitions Senior Level Competencies Influencing/ Leading Establish vision, frame key issues, and set high level strategy. Influence key executives and stakeholders to support significant change. Understand the problem at a more granular level and establish a hypothesis driven approach through which a solution can be derived. Effectively, solve the problem. Project Management Understand strategic direction as set by the hypothesis driven approach, set milestones, scope analysis, assign resources, manage execution and report findings. Serve as quality control lead. Junior Level Competencies Analytics/ Slide Building Conduct quantitative analyses in a defect free manner. Possess mastery of Microsoft Excel. Leverage Microsoft PowerPoint to create impactful, concise, and defect free slide loops. This information is confidential and was prepared by Charles Aris, Inc solely for the use of our client; it is not to be utilized by any third party without our prior consent 8